Addressable Television: We Know It Works, But Is It Getting Easier?

"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.

Today’s column is written by Michael Bologna, president at one2one Media.

There are two pressing questions that continue to raise debate in addressable television circles across the industry. When will national inventory enter the supply chain? And is the process of executing an addressable initiative getting easier, remaining consistent or becoming more difficult as the technology and infrastructure continue to scale?

Regardless of where it sits on the priority list, every national TV network recognizes the value of household-level targeting and applying segmentation in a more granular fashion than today’s Nielsen currency. After all, the fundamental principal behind addressable messaging is to improve efficiency by refining targets and reducing waste.

For national networks, this translates into the extraction of incremental value across select pools of inventory. While the industry welcomes national addressable inventory with open arms, the complexity lies in the distribution process. The primary method of serving a television ad to a specific set of households sits within the technology deployed by multichannel video programming distributor (MVPDs) and smart TV manufacturers.

Adding additional supply to the existing pool of addressable inventory is a good thing, but it doesn’t necessarily increase the footprint. In many cases, we are still working with the same set of households that have been addressable-enabled by the MVPDs.

With that said, adding incremental supply will certainly create the potential to grow the addressable marketplace, but to really take advantage of the new supply both the buy and sell side must align to scale and improve the workflow.

In the absence of a unified workflow, agencies and advertisers would be required to work with multiple systems to scale a campaign. This existing process will create additional internal work for each MVPD and smart TV manufacturer in the short term, as they will have to better manage delivery and will likely debate the value of the different inventory pools.

Should the decision be for each of the individual network groups to sell their own inventory, this will create complexities for the buy side, which would now be dealing with multiple MVPDs and multiple networks to achieve a completely scaled execution. This would put a strain on agencies and advertisers to the point where many just wouldn’t have the bandwidth to make it happen.

Overall, I don’t see the process of addressable execution getting easier any time soon. There are just too many variables, parties involved and unsynchronized agendas. With that said, the value of a targeted spot and the corresponding attribution has been proven and continues to be refined with every campaign.

As a person who lives and breathes addressable TV, I believe the next 18 months will be interesting. The sell side will begin to align on certain workflow elements and make the process easier. This will likely begin with individual automation and work toward a universal sales channel. This is critical as most advertisers care less about each individual channel and much more about the combined, scaled outcome.

Agencies and advertisers will continue to understand the significant value addressability brings to their overall marketing initiative. Remember, addressable TV is not a perfect fit for every brand. They will either turn to third-party partners or increase the number of employees with the bandwidth and expertise to perform these tasks.